December Newsletter
2018 has been a landmark year for the cannabis industry and the addition of several new state markets has the industry geared up for bigger things in 2019. This past year, Green Consulting Partners has worked with clients to submit over 30 state licenses and there continues to be a fervent interest in an industry that is still very much in its infancy.
As we near the end of the first year of legalized recreational cannabis in the State of California many jurisdictions have closed their application process, but, heading into 2019, there continues to be an abundance of opportunities across California as well as in many other states that have approved cannabis business activities over the past year.
In Southern California alone, there are a few major cities and one county that will be accepting applications in the upcoming months. Los Angeles is positioned to be the world’s largest cannabis market and the City will be processing Phase 3 business license applications in the Spring of 2019. Other state and local jurisdictions have approved cannabis business licensing, but have yet to establish a cannabis licensing timeline, so expect to hear about those as soon as they are released.
The following information provides a brief overview of some key California cities, as well as some of the more prominent State markets that are positioned to move forward with cannabis licensing programs:
Unincorporated Riverside County
Riverside County released Ordinance No. 348.4898 on October 23, 2018, which allows regulated commercial cannabis activities within the County. The ordinance establishes regulations for the following adult-use and medical-use cannabis activities: Cultivation; Retail; Manufacturing; Testing; Distribution; Temporary Cannabis Events.
The county will be opening up their application process for cannabis testing, manufacturing, distribution, and wholesale nurseries beginning December 26, 2018. The additional cultivation and retail cannabis activities will be subject to a unique application process that should begin in January 2019. The County has imposed limits on Conditional Use Permits (CUP) for both Cultivation and Retail cannabis businesses, but has not specified a licensing limit for any other commercial cannabis activity. Accordingly, while the County will only issue up to 50 Cultivation CUPs and 19 CUPs for retailers, there is a significant licensing opportunity for Distributors, Manufacturers and Laboratories in the jurisdiction.
Pasadena
In June 2018, the voters of Pasadena approved Measures CC & DD, which allow for the establishment and taxation of specific commercial cannabis activities within the city. Under Measure CC the following commercial cannabis businesses will be allowed to operate in the City of Pasadena with appropriate licensing: Cannabis Retailer with delivery (6 max); Cultivation (4 max); Testing Laboratories (4 max).
On November 13, 2018 the City of Pasadena held an application workshop where they further outlined their draft licensing and application processes. The city has expressed that they will be releasing final application materials on December 14, 2018, and that the city will be accepting the initial screening applications between January 1, 2019 and January 31, 2019. This gives applicants roughly 6 weeks after the final application materials are released to get their initial screening applications ready for submittal.
Pasadena will have the applications scored by an independent selection committee and they will be scored based off specific review criteria and points. Accordingly, we expect the application process to be highly competitive, and it is essential that any prospective Pasadena cannabis business owner gets started on their application strategy as soon as possible.
Chula Vista
Chula Vista recently passed cannabis tax Measure Q, which needed to be passed for the city to implement its cannabis-licensing program. The city said that with the passing of the tax measure they anticipate accepting applications on or after January 1, 2019. Chula Vista imposes limits on the number of commercial cannabis activities they allow as follows:
Cultivation: 10 indoor cultivations with max canopy of 20,000 ft2
Retailers: 3 per Council District –Maximum 2 storefront retail dispensaries per district
Distribution: No LimitManufacturing: No Limit
Testing Laboratories: No Limit
Los Angeles
The saga continues but we are entering the third and final chapter. So far, Los Angeles has accepted applications for Phases 1 & 2, but due to the overwhelming number of applications and intricacies of the program, the city has issued few licenses in comparison to what they have received. The much-anticipated date of Phase 3 is still unclear as the department of Cannabis Regulations (DCR) has been bottlenecked by their initial cannabis licensing phases. The city believes it will begin Social Equity processing in early 2019 and will open Phase 3 in Spring of 2019. Stay tuned for further information regarding Los Angeles’ Phase 3 application process.
Vista
In November 2018, the City of Vista passed Measure Z; the measure allows the city to establish a licensing program for up to eleven (11) cannabis retail storefront dispensaries. No other commercial cannabis activities will be allowed within the city. While the city is now allowed to establish an application and licensing program for cannabis storefront retailers, it has yet to release an updated ordinance or any submittal dates. Accordingly, parties interested in Vista are encouraged to begin pre-licensing preparations while continuing to follow developments in the City’s cannabis licensing program.
Other State Licensing Opportunities
In addition to California’s ongoing cannabis opportunities, there are a few states that either have prominent pending cannabis programs or will be legalizing cannabis businesses in the near future. Michigan’s Proposition 1 passed and will go into effect in December; Florida has a number of cases pending and some regulations that have passed that will change the outlook of licensing and products offered to Florida medicinal marijuana patients. Furthermore, the state of Missouri has approved a robust medical cannabis program under the New Approach Missouri Amendment.
Michigan
In November 2018 the voters of Michigan approved Proposition 1, which goes into effect December 6, 2018. The proposition legalizes adult recreational cannabis use. Michigan is the 1st state in the Midwest to fully legalize cannabis for recreational use by those 21 years or older. While the law goes into effect this December it is anticipated that Michigan will not see adult-use cannabis businesses until 2020.
Florida
Florida’s initial cannabis regulations imposed a limit on the number of Medical Marijuana Treatment Centers (MMCT) that could be established in the state. To add to the problem the state requires MMTCs to be vertically integrated and so licensing bodies were required to issue most of the licenses to just a few entities. Accordingly, Floridians trying to break into the cannabis market are having notable difficulty obtaining licenses because these large entities control most of the licensing under Florida’s medical cannabis program. Judge Charles Dodson ruled Florida’s program unconstitutional and in October the Health Department was given two weeks to begin registering new medical marijuana operators. This is a big win for those looking to apply for their first medical marijuana operator’s license in Florida.
Florida’s marijuana program allows for medical cannabis in limited forms. Currently, the state only allows cannabis topicals, creams oils, pills, and tinctures, but no form of cannabis is available that can be ingested through inhalation. This creates a problem for patients seeking immediate relief from their ailments and makes it difficult for patients who need the full spectrum of cannabinoids that are rarely available in flower alternatives. Additionally, patients tend to seek out specific strains for their symptoms, and this is increasingly difficult when they cannot obtain cannabis in its flower form. Currently, there is a pending lawsuit that if won, will allow MMTCs to sell cannabis flower to Florida medical marijuana patients. Parties interested in cannabis business licensing in the state of Florida are encouraged to stay tuned for further development in the early months of 2019.
Missouri
Missouri residents recently approved medical marijuana under the New Approach Missouri Amendment (NAMA), which posits medical marijuana regulatory parameters for both patients and businesses. The New Approach outlines a broad cannabis business licensing framework and grants the Department of Health and Senior Services the authority to promulgate additional regulations and compliance obligations for medical cannabis businesses.
The NAMA regulatory program creates four (4) distinct license types, all of which will be regulated by the Department of Health and Senior Services. There will be ample permits available to qualified applicants and the ownership limitations are relatively unrestrictive; however there is a requirement that applicant entities meet a 51% resident threshold. Under NAMA, Missouri will license at least sixty (60) Cultivation operations, eighty-seven (87) Manufacturing operations, and one-hundred and ninety-two (192) Dispensaries. NAMA requires the state to make application materials available by June of 2019, with applications scheduled to be accepted no later than August 2019.
Green Consulting Partners is a cannabis business licensing and legal compliance firm that has a proven track record of success with clients seeking local and state cannabis licensing. To date, Green Consulting Partners has worked with clients to obtain over 100 cannabis business licenses in states with legal cannabis industries. Cannabis business licenses are difficult to obtain, some more than others. It is advisable to accurately assess your options with a qualified consultant. Please do not hesitate to contact Green Consulting Partners here if you have any questions or would like further information about cannabis business opportunities.